《财务管理专业英语》教学课件05.ppt

5.1 Central Concepts in Financial Management 5.2 Simple vs. Compound Interest Rates and Future vs. Present Value 5.3 Annuity 5.4 Valuation Fundamentals 5.5 Bond Valuation 5.6 Common Stock Valuation CENTRAL CONCEPTS IN FINANCIAL MANAGEMENT Risk-return tradeoff Investors will take on additional risk only if they anticipate high return. Time value of money A dollar available today is worth more than a dollar available at a future date. This is because a dollar today can be invested to earn a return. SIMPLE VS. COMPOUND INTEREST RATES AND FUTURE VS. PRESENT VALUE Simple interest SIMPLE VS. COMPOUND INTEREST RATES AND FUTURE VS. PRESENT VALUE Compound interest SIMPLE VS. COMPOUND INTEREST RATES AND FUTURE VS. PRESENT VALUE Future Value Present Value discount rate——opportunity cost, required rate of return, and the cost of capital. ANNUITY ? Ordinary annuity—— the first cash flow in the series is one period from today. This is the most common form of annuity. ? Annuity due—— the first cash flow in the series occurs at the beginning of each period. ? Deferred annuity—— the first cash flow in the series occurs beyond one period from today. ? Perpetuity—— the series of payments continues indefinitely. ANNUITY ? Ordinary annuity—— the first cash flow in the series is one period from today. This is the most common form of annuity. ? Annuity due—— the first cash flow in the series occurs at the beginning of each period. ? Deferred annuity—— the first cash flow in the series occurs beyond one period from today. ? Perpetuity—— the series of payments continues indefinitely. ANNUITY ? Ordinary annuity ANNUITY Perpetuity ANNUITY Nominal and effective interest rates VALUATION FUNDAMENTALS Types of value Going-concern value Liquidation value Book value Market value Intrinsic value VALUATION FUNDAMENTALS Valuation Approaches discounted cash flow (DCF) valuation relative valuation contingent claim valuation option-pricing models VALUAT